RBI Introduces Stricter Guidelines for Asset Reconstruction Companies (ARCs)
| Aspect | Details |
|---|---|
| Why in News | RBI updates guidelines for Asset Reconstruction Companies (ARCs) to improve transparency and accountability in borrower settlements. |
| Key Revisions | - ARCs must adopt board-approved policies for borrower settlements. |
| Independent Advisory Committee (IAC) | - IAC required for settlements of accounts over ₹1 crore, consisting of professionals with technical, financial, or legal expertise. |
| Board Deliberations | - Board of Directors must review the IAC's recommendations and alternative recovery options. |
| Settlements Below ₹1 Crore | - ARCs can process settlements below ₹1 crore based on board policies. |
| Quarterly Reporting | - ARCs required to submit quarterly reports detailing settlement trends, fraud cases, and recovery timelines. |
| Settlements Involving Wilful Defaulters/Frauds | - Settlements involving wilful defaulters or frauds will follow stringent rules, regardless of settlement amount. |